Should Your First House Purchase be Cheap?
If you are intending to buy a new home, a question that you might have asked yourself over and over again might be whether your first house would be cheap, or expensive. Well, for this, it all depends on your financial situation.
There are many pros in buying a cheap house
Improvement/Upside opportunities: Cheap houses often come with issues that need to be repaired, but they can be improved if you decide that you want to repair everything yourself. With this, the land value, and house value can increase exponentially, especially if you intend to live on it for more than five years.
More Affordability: A cheaper house gives you more flexibility in your financial situation. With cheaper homes, you can pay as little as 20% of your budget on the deposit for a $50,000 or a $100,000 property.
Mortgage/Insurance: working with a mortgage broker can help you get better rates with your house, especially if you live in a place where prices are lower compared to most neighbourhoods. Make sure that you pay at least 20% of your budget towards the deposit, to avoid borrowing more than 90% of the property’s value.